sciedu.ca/ijhe Intemational Joumal of Higher Education vol. 2, No.

1; 2013

Funding Strategies for Qualitative University Education in Developing

Economies: The Case of Nigeria
Samuel Akinyerm•1
1
Mopelola Ayo-Shobowale, Lagos State University, Lagos, Nigeria
Conespondence: Samuel Akinyemi, Department of Educational Management, Faculty of Education, Lagos State
University, Lagos, Nigerim Tel: 234-808-388-5784. E-mail: Samuel.akinyemi@lasu.edu.ng

Received: December 10, 2012 Accepted: January 3, 2012 Online Published: January 8, 2013
doi:10.5430/ijhe.v2n1p53 URL: http://dx.doi.org/10.5430/ijhe.v2n1p53
Abstract
The problem of funding universities in developing economies has become a reoccurring problem often resulting in
calamitous effect on teaching and research, and intellectual capital flight of academics. The inadequate funding of
universities in developing countries especially West Africa is a prime cause of other problems that have undennined
quality in university education. With the level of funding in teltimy institutions in West Africa, there is the need to
evolve some funding strategies that will make it possible for the universities to achieve qualitative education In view
of the above, this paper examines funding strategies for qualitative university education in developing economes
using the experiences of the Nigerian Universities as a case study This paper made use of secondmy data which were
collected from the Federal Govemment of Nigeria's Office of Statistics and National Statistics Bureau. The tuition
fees analyzed in this paper were collected from the admission offices of the six public universities ptuposively
selected from 72 public universities (both federal and state universities) in Nigeria. Since the pursuit of qualitative
university education bothers on all stakeholders — the government, parents, individuals, firms and cooperate bodies,
this paper therefore recognizes ftnding as an extemal factor and a necessmy condition for achieving qualitative
university education in developing economes.
Keywords: Funding, Strategies, University education, Quality, Developing economies, Nigeria
1. Introduction
Underfunding of universities in developing economies has become a reoccun•ing problem often resulting in
calamitous effect on teaching and research, and intellectual capital flight of academics. This issue of university
underfunding in developing economies especially West African countries is a prime cause of other problems that
have undermined quality in university education, and it has manifestation in problems such as academic staff
shortage, dearth of librmy books and journals, decline of reading culture among students, dilapidated buildings,
obsolete equipment, abandoned capital projects, poor electricity and water supply, hostile working environment,
incessant strikes and mass exodus of Africa's best brains in academics. Bongila (2006) emphasizes that higher
education in Africa suffers a severe crisis of ftnding, and its leaders possess little experience with institutional
advancement as an alternative source of fimdmg.
Independent financing, which distinct private universities separately from their public universities, has posed a
senous challenge to African Universities to the extent that sourcmg the money to run even a small pnvate university
becomes a problem (Useem, 1999). UNESCO's World Education Report (2000) indicates that for 19 countries of
Sub-Sahara Africa, education expenditure averaged 5.1 percent of Gross Domestic Product and 14.3 percent of
government expenditure (Hinclichffe, 2000).
The funding situation in the Nigeria's university system in the 1960s and early 1970s was considered adequate until
late 1970s and early 1980s when the situation began to change, a situation in the university that was said to be
causing considerable tension and stress within the university system during the periods (Onoh, 1982). Aina (2002),
Babalola (2002), and Samuel (2003) fillåer affirm that Federal Universities in Nigeria are lacking the financial
resources to maintain educational quality in the face of enrolment explosion and this has led to brain drain of the
academics.
As a means of ameliorating these financial problems, many universities are forced to embalk on income generating
projects in order to source for ftnds. The Federal Government of Nigeria also directed through the National
Universities Commission (NUC) that all Federal Universities should generate 10 percent of their total yearly fund
internally through various revenue diversification means (Odebiyi and Aina, 1999).

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With the level of underfunding in tertiary institutions in West Africa, there is the need to evolve worthwhile
strategies that will make it possible for the universities to achieve qualitative education. It is against this background
that this paper examines ftnding strategies for qualitative university education in developing economies using the
experiences of the Nigerian Universities as a case study.
University education in Nigeria started with establishment of the University College (Now University of Ibadan) in
1948 following the Elliot Commission's recommendation of 1945. Subsequently, more federal universities were
established in the 1960s, 1970s, 1980s and 1990s. During the 1980s, the Federal Government of Nigeria convened its
Military training school (Nigerian Defence Academy) to a university. In 2007, FGN established Federal University
of Petroleum Resources (FUPRE).
In Nigeria, the 1979 constitution placed education on the concurrent legislative list. Consequently, at the state level,
the first state university, River State of University of Science and Technology (RSUST) was established in 1980.
Subsequently, more state universities were established durmg the 1980s, 1990s and 2000s. Nigena now has 36 state
universities.
Furthennore, the promulgation Decree 9 of 1993 made provision tor the establishment of private umversiües.
According to Okojie (2010), about 41 private universities have to date been issued licences to operate. With this
development, Nigerian tmiversity education system expanded from one University College in 1948 to 117 in 2011
and they consist of 36 federal universities, 36 state universities and 45 private universities (Alaneme, 2011). These
figures still remain to date
At present, FGN has also approved the establishment of additional 9 Federal Universities ready to take off fully
2. Methods
The population of the study in this paper comprised 72 Nigerian public universities (both federal and state
universities) out of which six universities were purposively selected for the study in this paper. The minimum tuition
fees analyzed in this paper were collected from the admission offices of these selected universities as reported in
Samuel and Akinyemi (2012). The analysis in this paper also made use of the federal government budgetary
allocations to federal universities and education tmst fund allocations of 2003 to 2007 which were extracted from the
Federal Government of Nigeria Annual Budget (2006) and the National Statistics Bureau (2009) respectively Since
these data were secondary data, they were considered reliable.
3. Traditional Funding Sources for Nigerian Universities
At present, there are several sources through which the Nigerian Universities are funded. These ftnding sources
which are the financial life wire of the university educational system in Nigeria are discussed as follows:
3.1 Subvention/Budgetary Allocation
3.1.1 To Federal Universities
Government subvention is the major source of funds for Federal Universities in Nigeria. This represents 90 per cent
of the total income to the universities and it is usually disbursed through National Universities Commission (NUC)
the body that assists the government to regulate the affairs of the Nigerian Universities. The remaining 10 per cent is
generated internally by each university (Ogbogu, 2011).
Table 1 below shows government budgetmy allocation to Federal Universities in some selected years.
Table 1. Federal Government Budgetmy Allocation to Federal Universities in Nigeria (some selected years)

Year Total Fed. Govt. Expenditure(l) Federal Allocation to federal Universities(2)

1991 1,554.20 1,194.40 76.80
1992 2,060.40 1,410.60 68.50
1993 7,999.10 5,753.00 71.90
1994 10,283.83 9,650.00 93.80
1995 12,728.70 1,480.40 11.60
1996 15,351.80 3,292.90 21.40
1997 15,946.00 6,260.70 39.20
1998 27,721.30 16.10
1999 31,568.10 29,902.80 66.21
2000 67,556.12 33,843.40 50.09
2001 59,744.20 34,681.30 58.05
2002 109,455.20 32,694.30 29.87
2006 151,723.50 78,066.80 51.60

Source: Okebukola (2003) and Federal Government Annual Budget (2006)

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3.1.2 To State Universities

The state universities equally receive subvention from the state governments through appropriation on educatiom
Some state universities also, in addition, receive deduction from their Local Governments' allocation accruing from
Federation Account.
3.1.3 To Private Universities
The private universities receive subvention from their proprietors.
3.2 Internally Generated Revenue (IGR)
As a means of finding solution to the unending financial problems in the nation's universities, the Federal
Govemment directed each tmiversity to generate at least 10 percent of its total revenue. In response to this, the
universities expanded the scope of their intemally generated revenue to include the following:
3.2.1 Tuition Fees
Universities receive a reasonable proportion of their revenue through students' fees. Adeyemi and Osunde (2005)
also remark that the pmt-time programmes are offered on a 'for-profit' basis (profit making venture), which in tum
financially subsidize regular students' fees.
Table 2. Minimum tuition fees in some Nigerian universities by 2012
Universities Minimum Tuition fees US$ Equivalence

University of Nigeria 75,000 468.75

Ambrose Ali University 62,000 387.5
Ladoke Akintola University of 110,000 679.01
Technology
Ondo State University 150,000 937.5
Lagos State University 193,000 1206.25
Anambra State University 84,000 525
Source: Samuel and Akinyemi (2012)
*US$1-N160
3.2.2 Endowment FundsDonation
Many mstltuuons of higher learnmg 111 Nigern do establish endowment tUnds where rich cituens assist 111 the
development of quality educauon. Promment cituens donate money and physical structures to the Institutions to be
held in their honour perpetuity. The intention is that the donors' names be immortalized in the institutions.
3.2.3 Grants
Several foreign grants have been received by the Nigerian Universities in fonn of aids to support academic
programmes and staff development. Some of the agencies that have supported Nigerian universities include John D.
and Catherine T. Mac Althur Foundation, Ford Foundation, World Health Organization (WHO), Carnegie
Foundations amongst others. The MacA1thur and Carnegie Foundations have been supporting 4 tmiversities in
Nigeria since 2010 in the key areas of staff development and development of ICT infrastructure (Ogbogu, 2011).
3.2.4 Private Contributors
Big finns, companies and investors such as Julius Berger, Chevron, etc. do contribute into the Nigerian Universities
in fonns of physical structures. The organizations such as Rotmy Club and Lion Club also donate buildings, books
and money to the Nigerian Universities.
3.3 Tertiary Education Trust Fund (Tetfund)formally known as Education Trust Fund (ETF)
The Educauon Trust Fund (ETF) was established by Education Tax Decree of 1993 111 response to the
recommendauons of some concemed groups m the country to raise timds tor the education sector. Th1S is 111
realization that the private sector as the mam beneficiary of the products of education should directly share m the
burden of its finance. The Decree provides that compames should pay 2 percent of their profits to the Education
Trust Fund and that the tund should be shared among the three levels of education (ternary, secondary and primary)

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on pro-rata basis for physical stmcture development, procurement of books and library facilities, purchase and
maintenance of equipment.
At present, the ETF known as Tetfund today has fonned a major source of ftnding for teaching facilities, research,
conferences, and staff training and development in the Nigerian tertiary institutions.
Table 2. Summary of Education Trust Fund allocations to institutions in Nigeria (2003 — 2007)
EDUCATION TRUST FUND ALLOCATIONS (N)

Inter-Universities

Institutions

Universities
Polytechnics
Colleges of
Education
Monotechnics
SSES
SPEBS

Other Agencies
Total
Source: National Statistics Bureau (2009)
3.4 Commercial Ventures
Commercial ventures which are different kinds are being explored by the Nigerian Universities to generate additional
ftnds. These ventures include amongst others :
Built up shops for rent
Petrol stations
Cybercatés

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Schools (for basic and secondmy education)

Hotels/Guest houses
Fee — for — service parking lots on campus
Launderettes
Transportation services
Renting of halls in idle me
Bookshops
Publishmg houses
Supennarkets
Catering services
3.5 Alumni relations andAssociations
There are projects embarked upon by Alumni of each university m their respective umversities. These projects
Include:
Construction of modern toilets on campus
Provision of concrete made chairs at strategic places on campus for relaxation
Construction of lecture halls

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Alumni relations are being maintained through:

Alumni tracking
Database of alumni
Periodic contact which mamtams sense ofbelong m alumm
Alumni representation in university's events (Okojie, 2010)
3.6 Undertaking researches and Consultancy Sen'ices
The universities in Nigeria do undeltake researches for big organizations and also render consultancy services as
well. These are done through:
Conductmg medium and small scale researches
Collaborative research and development
Providing the needed technological know-how to large, medium and small scale industries in the
country - Providing capacity building sewices
Orgamnng workshops, semmars and In-service trammg tor govemment workers and workers of pnvate
orgamuauons
Management development sewices.
3.7 Manufacturing/Processing
Food processing
Developmg useable products torm research results
Fabricating tools during the idle time for foundries (Okojie, 2010)
4. Strategies for raising additional funds for Universities in the Developing Economies
As palt of stmtegies for generating additional funds, universities should continue to embark on intensive
entrepreneurship activities and by so doing, all faculties must look for imovative ways of ensuring that their
activities generate Income. WIIat is needed is the emergence of entrepreneurial universities, centres of academic
excellence where the processes and the results research and Imovations are shared and sold to the investors and
developmental agents.
The strategies propounded by Alao (2011) as Internal revenue generatmg Initiatives tor Obatémi Awolowo
Umverslty m Nigeria could also be adopted in all other umverslües m the developmg economes. Some of these
strategies which are täculty based are m the box 1 :
Box 1: Recommendations for Faculties

FACULTIES RECOMMENDED INNOVATIVE ACTIVITIES TO GENERATE

INCONIE
Faculty of Educauon Academic stqfj• should be encouraged to invoh'e in constructive
engagement with Basic Education boards, Education Parastatals and
Organizations for qualitative education. There should be institutes of
education that will engage in floating part-time programs and
wort/nvhile consultancies for the development of education in the
country.

Faculty of Agriculture The Faculty should encourage its stqCto engage in thefollowing:
Agro-allied consultancies with River Basin Authority in the
country.
Consultancies on storagefacilitiesforfoodproducts in the country.
Commercialfårmingför stqCand students on underutilized large
expanse ofuniversity land.
Resuscitation ofuniversity teaching and researchfarm to make it
more viable andprofit oriented.

Faculty of Technology Faculty of Phannacy

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Faculty ofAlts Drug production

Drug education consultancies
More profit-oriented engagement with drugproducing companies
through productformulation and developing quality control ofnew
drugs & medicaments.
Profit-oriented cultural exhibitions andfestivals such as
cultural tradefairs.
Documentation and commercial production oforal literature of the
country 's people.
Faculty of Science
University theatre troupe be established and made commercially
viable.
Launching ofcultural renaissance initiative through embarking on
Faculty of Administration
profit-oriented research and documentation ofhistory, language, customs,
andpractices ofselected ethnic groups.
Faculty could develop profit-oriented engagement with
Faculty of Social Sciences institutions, companies and scientific research institutes etc through
good laboratories.
Consultancy sen'ices to foreign missions.
Consultancy sen'ices to companies, organizations, schools on
administrative issues.
Academic staffshould be encouraged to develop awarenessfor "lore
constructive engagement with banks, insurance companies, commercial
Faculty of Environment Design and establishments through the provision ofprofit-oriented consultancies.
Management
This faculty can also make money through provision ofshort
Faculty of Law courses on salesmanship skills, entrepreneurshp, etc to staffin
Establishment ofa commercial establishments.
technologvpark Foodprocessing
Academic stffcouldprovide real estate consultancies to governments,
Patency, Commercial production educational establishments, and organizations.
ofsome inventions ofthe faculty
Thefaculty couldprovide profitable consultancy sen'ices to political
More intimate andprofit oriented and social institutions outside the university community.
relationship with industries that have
technologv as basis ofproduction.

Source: Extracted from Alao (2010)

5. Other Initiatives outside Faculties
According to Alao (2010), other initiatives are:
5.1 Tourism Centres
Tourism potentials of universities could be enhanced for additional income.
Umversity biologcal gardens could be Improved tor profit makmg.
Numerous scenic mountains, rocks, rivers and beautiful vegetation on large expanse of university's land could be
improved and turn into profitable tourism ventures.
5.2 Real Estate Development
Large expanse of land of universities not fully utilized could be used for commercial oriented real estate
development.
6. Conclusion
Various traditional sources for funding Nigerian Universities were examined in this paper. The alternative strategies
adopted for raising additional funds for university education in Nigeria were also examined with a view to
suggesting ways through which the problem of funding universities in developing economies could be ameliorated.

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The paper also suggests pragmatic approaches in generating incomes for the faculties. Consequent upon achieving
qualitative university education in developing economies, ftnding should therefore be seen as all inclusive where
government, households, private sector and enhanced intemally generated revenue could be efficiently and effective
hamessed for providing qualitative university education. Arising from this, university managements should be
suitably aggressive in identifying and exploiting various available fillid generating avenues. Productive offices
should be created to handle intemally generated revenue programmes. Finally, proceeds from intemally generated
revenue should be judiciously utilized as a necessary condition for achieving qualitative university education in
developing economies. To this end, our tmiversities should engage in proactive funding that focuses on education
(acquisition of marketable skills) rather than schooling (reading and writing).
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